ADGM considers regulatory framework for virtual currencies. John MacDougall / AFP
ADGM considers regulatory framework for virtual currencies. John MacDougall / AFP
ADGM considers regulatory framework for virtual currencies. John MacDougall / AFP
ADGM considers regulatory framework for virtual currencies. John MacDougall / AFP

US regulator halts restaurant app's initial coin offering


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The chairman of the US securities and exchange commission (SEC) warned investors of the dangers of putting their money into cryptocurrencies, saying trading and public offerings in the emerging asset class may be in violation of federal securities law.

The statement by Jay Clayton came just hours after the US securities watchdog stepped in to stop an “initial coin offering” (ICO) from a restaurant review app, after the company failed to register it as a security.

ICOs allow start-ups founded on cryptocurrency technologies such as blockchain to quickly raise capital by issuing virtual tokens to investors. Such offerings have become more common in the past year, but little data about them is available because the market has been largely unregulated.

Monday’s enforcement action was significant because it showed the SEC would step in to address ICOs for registration violations even if there were no claims of fraud, according to SEC officials.

“A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that ... there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation,” Mr Clayton said.

“If an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost,” he told investors in the statement.

Mr Clayton also warned industry professionals that ICOs in many cases would need to comply with federal rules governing the issuance of securities, including registering with the SEC or qualifying for an exemption that allows issuers to sell shares privately to accredited investors.

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Read more:

Demand for bitcoin grows in India

Rush is on as 'Fear Of Missing Out' kicks in before Bitcoin hits Wall Street

Bitcoin tumbles as China bans initial coin offerings

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He added that many platforms trading in cryptocurrencies may also be in violation of laws that require them to register as an exchange, or an alternative trading platform.

On Monday, the SEC halted an ICO because it had not registered with the regulator. Privately held Munchee agreed to halt its offering and refund investor proceeds after the SEC contacted the company on November 1, the regulator said.

The SEC objected to Munchee’s plan to raise US$15 million in capital by selling “MUN tokens”, which could be purchased or earned by users for writing restaurant meal reviews on its app. The company also said it was in talks with restaurants to accept those tokens for meals, and to sell advertising in exchange for tokens, and that the tokens could increase in value.

The SEC said investors could reasonably expect a return on its investment in MUN tokens, which in turn would make it a security requiring SEC registration.

Munchee consented to the SEC’s order without admitting or denying the findings. The company did not immediately respond to a request for comment.

Earlier this month, the SEC’s newly created cyber unit filed its first ICO charges against a privately held company, PlexCorps, saying it had defrauded investors with its “PlexCoin” ICO. That case is pending in a New York federal court.

Our legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Marathon results

Men:

 1. Titus Ekiru(KEN) 2:06:13 

2. Alphonce Simbu(TAN) 2:07:50 

3. Reuben Kipyego(KEN) 2:08:25 

4. Abel Kirui(KEN) 2:08:46 

5. Felix Kemutai(KEN) 2:10:48  

Women:

1. Judith Korir(KEN) 2:22:30 

2. Eunice Chumba(BHR) 2:26:01 

3. Immaculate Chemutai(UGA) 2:28:30 

4. Abebech Bekele(ETH) 2:29:43 

5. Aleksandra Morozova(RUS) 2:33:01  

UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

UAE currency: the story behind the money in your pockets
World Cup warm-up fixtures

Friday, May 24:

  • Pakistan v Afghanistan (Bristol)
  • Sri Lanka v South Africa (Cardiff)

Saturday, May 25

  • England v Australia (Southampton)
  • India v New Zealand (The Oval, London)

Sunday, May 26

  • South Africa v West Indies (Bristol)
  • Pakistan v Bangladesh (Cardiff)

Monday, May 27

  • Australia v Sri Lanka (Southampton)
  • England v Afghanistan (The Oval, London)

Tuesday, May 28

  • West Indies v New Zealand (Bristol)
  • Bangladesh v India (Cardiff)
Gulf rugby

Who’s won what so far in 2018/19

Western Clubs Champions League: Bahrain
Dubai Rugby Sevens: Dubai Hurricanes
West Asia Premiership: Bahrain

What’s left

UAE Conference

March 22, play-offs:
Dubai Hurricanes II v Al Ain Amblers, Jebel Ali Dragons II v Dubai Tigers

March 29, final

UAE Premiership

March 22, play-offs: 
Dubai Exiles v Jebel Ali Dragons, Abu Dhabi Harlequins v Dubai Hurricanes

March 29, final

PSG's line up

GK: Alphonse Areola (youth academy)

Defence - RB: Dani Alves (free transfer); CB: Marquinhos (€31.4 million); CB: Thiago Silva (€42m); LB: Layvin Kurzawa (€23m)

Midfield - Angel di Maria (€47m); Adrien Rabiot (youth academy); Marco Verratti (€12m)

Forwards - Neymar (€222m); Edinson Cavani (€63m); Kylian Mbappe (initial: loan; to buy: €180m)

Total cost: €440.4m (€620.4m if Mbappe makes permanent move)

COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners